How to Prepare Financially When Illness or Injury Strikes
Having the proper insurance, savings, and legal documents in place can help prevent a health crisis from turning into a financial crisis.
Line up people to manage your care and finances.
- Set up a durable power of attorney for health care, also known as a health care proxy, to name the person you want making your medical decisions if you are unable to make them yourself.
- Set up a durable power of attorney for finances and perhaps a revocable living trust to give someone you trust the legal authority to manage your financial affairs if you become incapacitated.
Plan how to keep your business open.
Can you afford to keep your business running without the revenue you personally generate?
If you can’t consider purchasing business overhead expense insurance to help cover your business’ rent, utilities, and insurance, as well as your employees’ salaries and benefits, if you become too ill or injured to work. And depending on the coverage you choose, this type of insurance can even help cover the salary of someone to replace you while you recuperate.
Plan how to pay the bills.
- Health Insurance. A good health insurance plan from your employer, an insurance company, or an insurance marketplace (www.healthcare.gov) can help with your medical bills. If you are age 65 or older, you can generally get health coverage through Medicare.
- Long-term care insurance. Regular health insurance and Medicare generally do not cover long-term care services, such as help with eating, bathing, or dressing. Unless you can afford to pay for these services on your own, consider purchasing long-term care insurance.
- Emergency fund. Money from your emergency fund can help cover your living expenses while you are unable to work. A common rule of thumb is to set aside enough money to cover three to six months of living expenses.
- Disability insurance. Disability insurance can also help cover your living expenses by replacing part of your income for a period of time when you are too ill or injured to work.
Copper Leaf Financial is a fee-only, fiduciary firm and we can help you by providing advice on all financial matters. With offices in Williston and Rutland, Vermont, we develop a customized wealth management (financial) plan designed to integrate every aspect of your financial life. This is "true wealth management" - a holistic, all-encompassing approach that goes beyond just investment advice. Call us today at (802) 878-2731 to schedule a strategy session and begin building your road map to financial success.Article published in Copper Leaf Financial publication Eye on Money - September 2018 issue.